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Cogent Communications (CCOI)
NASDAQ:CCOI
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Cogent Comms
(NASDAQ:CCOI)
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Select Model
Rating:54Neutral
Price Target:
$27.00
▲(46.02% Upside)
Action:ReiteratedDate:02/21/26
The score is held down primarily by weak recent profitability/cash flow and elevated leverage (including negative equity), which raise financial risk. Offsetting factors include improving near-term technical momentum, very high dividend yield, and earnings-call guidance pointing to continued margin expansion and product mix improvements, though refinancing and revenue-attrition risks remain material.
Positive Factors
All-fiber network scale
Cogent’s extensive all-fiber network is a durable competitive advantage: large geographic footprint and fiber ownership lower incremental transport costs, enable higher capacity services, and create barriers to entry. This supports sticky, bandwidth-hungry customers and long-term revenue stability.
On-net mix and margin expansion
Shifting revenue toward on-net, higher-margin products reduces reliance on costly transit and off-net providers. A sustained on-net mix increases gross margins and cash conversion potential, making future EBITDA expansion more structural rather than dependent on one-time items.
IPv4 leasing revenue growth
Owning IPv4 address inventory provides a recurring, asset-backed revenue stream that can be scaled with limited capex. Strong YoY leasing growth diversifies revenue, boosts cash generation potential, and offers optionality to monetize a scarce asset over multiple years.
Negative Factors
Elevated leverage & negative equity
Very high leverage and negative equity materially weaken financial flexibility. Refinancing risk and higher borrowing costs constrain strategic choices, limit capital returns, and put pressure on execution of growth or network investment plans over the medium term.
Weak operating and free cash flow
Sustained negative operating and free cash flows reduce the company’s ability to de-lever organically, fund capex from operations, or absorb shocks. This forces reliance on external financing or asset sales, increasing execution risk for long-term strategy and refinancing plans.
Sprint-acquired revenue attrition & infrastructure drag
Rapid attrition of acquired Sprint revenue erodes the revenue base and hides integration risk. The related infrastructure generates substantial negative EBITDA and planned data-center sales face timing and proceeds uncertainty, creating a persistent earnings drag and execution risk.
Cogent Comms (CCOI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$948.18M
Dividend Yield13.93%
Average Volume (3M)1.18M
Price to Earnings (P/E)―
Beta (1Y)0.58
Revenue Growth-6.48%
EPS Growth-588.01%
CountryUS
Employees1,899
SectorCommunication Services
Sector Strength97
IndustryTelecommunications Services
Share Statistics
EPS (TTM)-0.64
Shares Outstanding50,062,157
10 Day Avg. Volume1,951,268
30 Day Avg. Volume1,182,262
Financial Highlights & Ratios
PEG Ratio0.51
Price to Book (P/B)-16.18
Price to Sales (P/S)1.06
P/FCF Ratio-97.68
Enterprise Value/Market Cap3.83
Enterprise Value/Revenue3.80
Enterprise Value/Gross Profit11.84
Enterprise Value/Ebitda19.35
Forecast
1Y Price Target
$25.29Price Target Upside36.78% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)-3.66
Revenue Forecast (FY)$985.10M
Cogent Comms Business Overview & Revenue Model
Company DescriptionCogent Communications Holdings, Inc., through its subsidiaries, provides high-speed Internet access, private network, and data center colocation space services in North America, Europe, Asia, South America, Australia, and Africa. The company offers on-net Internet access and private network services to law firms, financial services firms, and advertising and marketing firms, as well as heath care providers, educational institutions and other professional services businesses, other Internet service providers, telephone companies, cable television companies, Web hosting companies, media service providers, mobile phone operators, content delivery network companies, and commercial content and application service providers. It also provides Internet access and private network services to customers that are not located in buildings directly connected to its network; and on-net services to customers located in buildings that are physically connected to its network. In addition, the company offers off-net services to corporate customers using other carriers' circuits to provide the last mile portion of the link from the customers' premises to the network. Further, it operates data centers that allow its customers to collocate their equipment and access the network. The company operates 54 data centers and provides facilities to 3,035 buildings and on-net services to 1,817 to multi-tenant office buildings. It serves primarily to small and medium-sized businesses, communications service providers, and other bandwidth-intensive organizations. Cogent Communications Holdings, Inc. was founded in 1999 and is headquartered in Washington, the District of Columbia.
How the Company Makes MoneyCogent Communications generates revenue primarily through its subscription-based model, where customers pay for Internet access and related services on a recurring basis. Key revenue streams include dedicated Internet access, Ethernet transport services, and colocation services. The company also benefits from long-term contracts with its clients, which provide a steady and predictable income. Additionally, Cogent has strategic partnerships with other telecommunications providers and businesses that enhance its service offerings and expand its customer base, contributing further to its earnings. The focus on providing reliable and competitively priced services allows Cogent to attract and retain a diverse range of customers, from small businesses to large enterprises.
Cogent Comms Earnings Call Summary
Earnings Call Date:Feb 20, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Neutral
The call presents a mixed but constructive picture: management showcased clear operational progress — margin expansion, EBITDA growth, strong wavelength and IPv4 leasing momentum, improved on‑net mix, and a plan to reduce capital intensity — while also acknowledging material challenges from the rapid attrition of Sprint-acquired revenues, a sizable infrastructure EBITDA drag, continued high leverage and an upcoming debt refinancing, and pricing pressure on some product metrics. Management’s tone was optimistic about future revenue mix improvements, continued margin expansion (albeit at a moderated pace), and active data‑center monetization and refinancing plans, but several execution and timing risks remain.Q4-2025 Updates
Positive Updates
Wavelength Revenue and Footprint Expansion
Wavelength revenue was $12.1M in Q4, up 74% year-over-year and ~19% sequentially; full-year 2025 wavelength revenue was $38.5M, +100% YoY. The service footprint increased to ~1,096 enabled locations (1,068 at year-end reported) with ~2,064 wavelength connections (end of quarter) and provisioning intervals of ~30 days. Wavelength customers grew 18% sequentially and 85% YoY for the year.
Strong Gross Margin Improvement
Q4 gross margin was $112.5M, up $1.6M sequentially; gross margin rate increased 100 bps sequentially to 46.8%. Full-year 2025 gross margin was $442.7M, up $46.7M YoY; full-year gross margin rate improved to 45.4% from 38.2% (+720 bps YoY).
EBITDA and Margin Expansion (Multiple Measures)
Quarterly EBITDA as adjusted increased by $3.0M to $76.7M with adjusted EBITDA margin (Dave’s metric) expanding ~140 bps to 31.9% sequentially. EBITDA Classic for full year 2025 was ~$192.8M, up ~$70M YoY from ~$122.8M, and EBITDA Classic margin rose to 19.8% from 11.9% (+~790 bps YoY).
On-net Revenue Mix Shift Toward Higher-Margin Products
On-net revenues rose materially: on-net as a percentage of total revenues increased from 47% in 2023 to ~61% this quarter (off-net fell from 48% to ~39%; non-core down from 5% to <1%). On-net revenue (including on-net wavelength) was $146.4M in the quarter, +7.8% YoY and +0.6% sequentially.
IPv4 Leasing Acceleration
Full-year 2025 IPv4 leasing revenue was $64.5M, +44% YoY. Leased addresses totaled 15.3M (up 2.2M or +17% YoY) and Cogent holds title to 37.8M IPv4 addresses, supporting ongoing leasing revenue.
Traffic and Sales Trends
IP network traffic grew 4% sequentially and 10% YoY in the quarter (9% for the full year). Over 80% of 2025 sales were on-net. Sales force: 590 quota-bearing reps; sales rep productivity was 4.1 units in Q4 (improved vs 2024). Churn improved: on-net monthly churn 1.2% (1.3% prior quarter), off-net 1.9% (2.1% prior quarter), wavelength <0.5%.
Capital Intensity and CapEx Progress
CapEx declined as integration and data-center modernization completed; Q4 CapEx $37M and full-year CapEx $187.6M. Management cited a $41M reduction in CapEx tied to completion of reconfiguration work in Sprint-acquired facilities and conversion of 125 facilities into data centers.
Improving Leverage Metrics and Clear Deleveraging Plan
Gross-debt leverage (adjusted) improved to 7.35 from 7.45 QoQ; net-debt ratio improved to 6.64 from 6.65. Management intends to refinance the $750M 2027 unsecured notes with $750M secured notes and targets ~4x net leverage before materially resuming returns of capital (dividends/share buybacks). T-Mobile receivables ($203.1M) are being treated as part of leverage calculus.
Negative Updates
Significant Attrition of Sprint-Acquired Revenue
Sprint wireline acquired revenue declined from a $118M quarterly run-rate at close (May 2023) to ~$43M this quarter — a ~$75M quarterly decline (-64% since close). Sprint-acquired revenues now represent ~18% of total revenues (down from 42% at close).
Enterprise and Corporate Revenue Weakness
Quarterly enterprise revenue fell 24.7% YoY and 5.8% sequentially; full-year enterprise revenues declined ~20.3% YoY. Quarterly corporate revenues decreased 9.1% YoY and 2.3% sequentially, with Sprint-acquired corporate revenue collapsing from ~$39M/quarter at close to ~$8.1M/quarter at year-end 2025.
Total Revenue Still Showing Near-Term Pressure
Total revenue was $200.14M in Q4 and $975.8M for FY2025. Q4 total revenue declined sequentially by $1.4M (-0.6%), though monthly sequential trends inside the quarter improved. Off-net revenue declined 17.9% YoY and 2.3% sequentially.
Average Price per Megabit Decline
Average price per megabit for installed base fell 12% sequentially to $0.14 and 34% YoY. New-customer price per megabit was $0.06 (down 18% sequentially and 46% YoY), signifying ongoing pricing pressure in some segments.
Infrastructure Segment Drag and Data Center Monetization Uncertainty
The infrastructure segment (Sprint-acquired assets) has a negative EBITDA of ~$140M, partly offset by ~$60M from IPv4 securitization (net infrastructure EBITDA ~- $80M). Management expects to monetize surplus data centers (24 facilities) but a previously announced LOI fell through because buyer sought owner financing; sales remain in active discussions but timing and proceeds are uncertain.
High Absolute Leverage and Upcoming Refinancing Need
Total gross debt at par was ~$2.4B and net debt ~$1.9B at year-end. Leverage ratios remain materially above the stated 4x net leverage target; the $750M 2027 notes require refinancing within ~18 months and refinancing risk/terms remain to be finalized (management plans secured refi dollar-for-dollar).
EBITDA as Adjusted Volatility from One-Time Items
Comparability of adjusted EBITDA is affected by large timing/contractual items: a $104.2M reduction in IP transit payments from T-Mobile and a $21.4M reduction in reimbursable Sprint acquisition costs reduced adjusted EBITDA comparisons; management notes adjusted margins moderated (full-year adjusted EBITDA margin 30% vs 33.6% prior year).
Pricing/Wholesale Dynamics in IPv4 Leasing
IPv4 leasing volume grew strongly (+44% YoY revenue), but some wholesale transactions compressed average prices, and Q4 IPv4 revenue was slightly down QoQ despite more addresses leased, reflecting mix/timing of wholesale vs retail deals.
Company Guidance
Management’s guidance was that growth should normalize to a multiyear revenue CAGR of about 6–8% with EBITDA-margin expansion of roughly 200 basis points per year (after nearly 800 bps of expansion in 2025); they plan to refinance the $750M 2027 unsecured notes with $750M of secured notes after the make‑whole period in June and target reducing net leverage to ~4x before materially restoring capital returns. Key operating targets and progress cited: on‑net revenue mix has risen from 47% in 2023 to roughly 61% this quarter (58.4% for the year) while off‑net has fallen from 48% to ~39% (non‑core <1%); Wavelength footprint now wave‑enabled in ~1,096 locations (1,068 at year‑end), sold in 518 locations, with Q4 Wavelength revenue $12.1M (+74% YoY, +19% sequential), full‑year $38.5M (+100% YoY), 2,064 wavelength connections (up 18% sequential) and an ambition to capture ~25% of the North American wavelength market. Financial and cash‑flow metrics referenced include Q revenue $200.14M and FY revenue $975.8M, EBITDA Classic FY2025 ~$192.8M (margin 19.8% vs 11.9% FY2024), EBITDA as‑adjusted Q4 $76.7M (31.9% margin) and FY as‑adjusted margin ~30%, gross debt at par ~$2.4B and net debt ~$1.9B (including $203.1M due from T‑Mobile), adjusted gross debt/EBITDA ~7.35 (vs 7.45 prior quarter) and net debt/EBITDA ~6.64 (vs 6.65), CapEx Q4 $37M and FY $187.6M, IPv4 leasing revenue $64.5M (+44% YoY) with 15.3M addresses leased (title to 37.8M), ARPUs: on‑net $509, off‑net $1,234, wavelength $2,114, IPv4 $0.30/address, monthly churns on‑net 1.2% / off‑net 1.9% / wavelength <0.5%, and IP traffic +10% YoY (+4% sequential).Cogent Comms Financial Statement Overview
Summary
Recent fundamentals are pressured: profitability and cash generation deteriorated sharply (net income swung to a sizable loss; operating cash flow and free cash flow turned negative). The balance sheet is a key risk with very high leverage and negative equity in the latest period, limiting financial flexibility despite some debt reduction.Income Statement
Revenue expanded strongly through 2023 and grew again in 2024 (+10.1%), but profitability deteriorated sharply: net income swung from a large profit in 2023 to a sizable loss in 2024, with negative operating profit and negative net margin in 2024. The 2025 annual figures show revenue recorded at zero with a large net loss, which creates significant uncertainty around recent operating performance and drags the score.28
Negative
Balance Sheet
Leverage is elevated: debt-to-equity was very high in 2024 (~10.5x), and equity turned negative in 2025, a major balance-sheet red flag. While total debt fell materially in 2025 versus 2024, the combination of weak/negative equity and recent losses implies limited financial flexibility and higher refinancing risk.18
Very Negative
Cash Flow
Cash generation weakened meaningfully. Operating cash flow turned negative in 2024 and remained negative in 2025, while free cash flow was deeply negative in 2024 and still negative in 2025. Earlier years (2020–2022) showed solid positive operating cash flow and free cash flow, but the recent reversal suggests higher funding needs and reduced capacity to de-lever organically.22
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 975.77M | 1.04B | 940.92M | 599.60M | 589.80M |
| Gross Profit | 170.62M | 394.27M | 396.69M | 371.45M | 363.46M |
| EBITDA | 186.58M | 161.69M | 1.56B | 229.29M | 218.72M |
| Net Income | -182.17M | -204.07M | 1.27B | 5.15M | 48.19M |
Balance Sheet | |||||
| Total Assets | 3.10B | 3.17B | 3.21B | 1.01B | 984.56M |
| Cash, Cash Equivalents and Short-Term Investments | 205.11M | 198.49M | 75.09M | 223.78M | 319.61M |
| Total Debt | 2.93B | 2.34B | 1.83B | 1.36B | 1.26B |
| Total Liabilities | 3.16B | 2.95B | 2.60B | 1.53B | 1.36B |
| Stockholders Equity | -63.85M | 222.85M | 609.56M | -518.63M | -373.10M |
Cash Flow | |||||
| Free Cash Flow | -10.58M | -203.64M | -112.29M | 94.74M | 100.34M |
| Operating Cash Flow | -10.58M | -8.64M | 17.34M | 173.71M | 170.26M |
| Investing Cash Flow | -87.57M | 21.49M | 76.73M | -78.97M | -69.92M |
| Financing Cash Flow | 62.90M | 105.92M | -257.85M | -144.85M | -140.82M |
Cogent Comms Technical Analysis
Negative
18.49
Price Trends
23.13
Negative
27.14
Negative
35.04
Negative
Market Momentum
-0.92
Positive
33.37
Neutral
16.46
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CCOI, the sentiment is Negative. The current price of 18.49 is below the 20-day moving average (MA) of 23.85, below the 50-day MA of 23.13, and below the 200-day MA of 35.04, indicating a bearish trend. The MACD of -0.92 indicates Positive momentum. The RSI at 33.37 is Neutral, neither overbought nor oversold. The STOCH value of 16.46 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CCOI.
Cogent Comms Risk Analysis
Cogent Comms disclosed 42 risk factors in its most recent earnings report. Cogent Comms reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cogent Comms Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $2.51B | 22.54 | 22.01% | 3.30% | 7.30% | 21.31% | |
70 Outperform | $1.23B | 15.29 | 27.94% | 0.47% | 2.52% | 10.02% | |
63 Neutral | $4.24B | -0.61 | ― | ― | ― | ― | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
56 Neutral | $4.81B | -69.73 | 2.65% | 0.39% | -22.79% | 79.90% | |
54 Neutral | $948.18M | -4.84 | -229.15% | 13.93% | -6.48% | -588.01% |
* Communication Services Sector Average
CCOI
Cogent Comms
18.55
-49.33
-72.67%
IDT
IDT
50.52
2.16
4.47%
IRDM
Iridium Communications
22.49
-8.80
-28.13%
LBTYA
Liberty Global A
12.52
1.02
8.87%
TDS
Telephone & Data Systems
44.73
9.36
26.46%
Cogent Comms Corporate Events
Business Operations and StrategyExecutive/Board Changes
Cogent Comms extends CEO contract, tightens incentive alignment
Positive
Jan 7, 2026
On December 31, 2025, Cogent Communications Holdings, Inc. amended Chief Executive Officer David Schaeffer’s employment agreement, extending his term through December 31, 2028, resetting his annual salary to $1 million, and capping his annual cash incentive at a $1.25 million target tied to year‑over‑year EBITDA growth, with no bonus payable if EBITDA growth is zero or negative. The board also established a multi‑year equity package for Schaeffer, including substantial time‑vesting and performance‑vesting restricted stock awards for 2026–2028 that depend on continued employment and on achieving positive compound annual EBITDA growth, while granting additional long‑term restricted stock retention awards to the CFO, chief legal officer and chief revenue officer that vest in 2029, collectively reinforcing leadership retention and aligning top executives’ compensation more tightly with profitability and growth metrics.
The most recent analyst rating on (CCOI) stock is a Hold with a $18.00 price target. To see the full list of analyst forecasts on Cogent Comms stock, see the CCOI Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.